NOBLE gears up for capital markets in shipping with equity analyst hire

NEW YORK October 5, 2017 / TradeWinds

Boutique bank appoints veteran oil and energy specialist as its prepares for US roadshows

Noble Capital has taken its next step towards entering the US capital markets by hiring an equity analyst with extensive experience in the oil and energy sectors. Speaking to TradeWinds on the sidelines of this week’s Capital Link Maritime Forum in New York, Poe Fratt said Noble was gearing up to launch coverage within 2017.

“We’d like to launch as soon as possible — hopefully by year’s end,” Fratt said. “Our goal is to target 16 to 20 companies initially with a presence in tankers, dry bulk, containers and smaller, more diverse companies.”

TradeWinds highlighted Noble’s push into shipping in August, noting the hire of Mark Suarez to lead on investment banking. Noble officials said at that time that they were on the hunt for an analyst, so Fratt’s recent appointment is the other shoe dropping.

One of the arenas in which Noble hopes to plant a footprint is the Jones Act, offering financial services to companies involved in the sector.

The US cabotage trade has come under short-term pressure with the recent spate of hurricanes in the Caribbean and US Gulf, and perhaps more serious peril from the efforts of perpetual foes such as US Senator John McCain.

But Noble’s priority on the sector sends a clear signal that it does not expect the law to be repealed. And while Fratt is getting started on the Jones Act, Suarez made his views clear this week when contacted separately by TradeWinds.

“The Jones Act is not going anywhere,” he said. “It’s a very well unionised industry with a lot of votes attached to those unions. Politically it’s not the right thing to do to challenge it.”

Fratt has 27 years in research, with 18 years on the “sell” side of the industry and nine on the “buy” side, but has had only limited experience as a shipping analyst. So his getting up to speed applies to the whole sector.

However, he is counting on his experience in oil and with master limited partnerships to ease that transition.

“I know a lot about the energy industry and the logistics part of it,” Fratt said. “I’ve spent a lot of time looking at upstream and downstream. But I realise I need to learn more.”

Fratt is getting off to a flying start, accompanying Tsakos Energy Navigation to Boston this week to meet with investors in a non-deal roadshow.

Later this month, he will join New York-listed International Seaways on a non-deal roadshow to Chicago, Milwaukee and Detroit — the latter two are new hunting grounds for the spin-off of Overseas Shipholding Group.

Seaways own crude and products tonnage, Fratt acknowledges this is not the optimal time for tanker owners to make an approach to investors given weakness in both sectors. But he adds that this can cut both ways.

“You always want to be looking forward, anticipating the recovery and trying to get ahead of the recovery,” he said.

“You’ll be ready when you think the inflection point is coming. You want to skate to where you think the [hockey] puck is going to be, not where it is at the moment. That’s why we think it’s important to get companies out both in the good times and bad.”

Fratt has worked most recently as an analyst in the Seattle office of finance firm DA Davidson & Co.